What is Potash

Potash is the common name for any of several compounds containing potassium, such as potassium carbonate (K2CO3), potassium oxide (K2O) and potassium chloride (KCl). These compounds are used primarily in the manufacturing of fertilizer. The term potash derives from the Dutch word potaschen, which means pot-ashes. 

BREAKING DOWN Potash

​​​​​​​Potash refers to any mined or manufactured salt that contains potassium in a water-soluble form. Potash was historically made by saturating wood ashes in water, then heating the mix in an iron pot until the liquid evaporated, leaving behind a white residue called potash. The ash finds uses in the manufacture of fertilizers, soap, glass, and ceramics. 

Potassium is the seventh most widely found element in our planet's crust but requires refining before use. Potash has been used since about the year 500 A.D. to help make materials such as glass and soap. The American potash industry began in the 18th and 19th centuries when settlers cleared forests to plant crops, burning any excess wood. The wood ashes were sold either to create soap or to boil down into potash.

Similar to potash, the creation of pearl-ash is through the burning of cream of tartar. This action produces potassium carbonate which is a more refined version of potash. Also known as salts of tartar, pearl-ash was historically made by burning and refining potash.

Trading in Potash as a Fertilizer

Potash contains water-soluble potassium which helps plants grow. As a fertilizer, this nutrient helps farmers improve the taste, texture, color, yield and water retention in crops. Common crops that rely on potash include corn, rice, wheat, and cotton, among many others. There is no substitute for potash as a fertilizer and the most common types used include:

  • Potassium chloride (KCl)
  • Potassium sulfate or sulfate of potash (SOP)
  • Potassium magnesium sulfate (SOPM)

According to the U.S. Geological Service (USGS), the 2017 estimated value of marketed potash was USD 400 million. Eighty-five percent of the use was as a fertilizer. Most of the imported potash used in the U.S. came from Canada. 

One way traders can trade in potash is through trading companies involved in the mining and refining of potash. These companies include Potash Corporation of Saskatchewan (POT), Agrium (AGU), and Mosaic (MOS), all of which trade on the New York Stock Exchange (NYSE). Farmers around the globe use potash and futures are available for potash, listed as potassium chloride.

Potash Reserves and Production

Potash reserves are common in areas that were ancient shallow seas. As the earth developed and the water receded, the salts, a mixture of potassium chloride (KCl) and sodium chloride (NaCl) were left behind, forming potash. Over time, the earth's changing surface allowed most of these mines to be buried deep in the earth's crust, and today, most potash mines are quite deep.

In its raw form, potash deposits exist around the globe. Together, the countries of Belarus, Canada, China, Germany, Israel, Jordan, and Russia produce 90 percent of the world's potash. However, the number one potash-producing region is Eastern Europe. Canada has the largest reserves. In the United States, potash is produced in New Mexico, Michigan, and Utah.

Several different methods can produce potash. However, in large-scale production, two methods see primary use. 

  1. The evaporation method requires the addition of hot water to the potash. The potash dissolves, and it rises to the surface. The excess water is evaporated, creating a concentrated substance. 
  2. In dissolution mining, the recovery of potash bearing deposits come from deep-well mines. Once recovered, the potash goes through a grinding process to turn it into a powder.